-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QZuuYSAPG3xJFbh4MaGxp4xNeviEAZHIcLvxt6E9XBc+KzfP+oYbCMBq8ekVJoR1 abBcmlnYikz31bekbbzqFg== 0000899243-01-501664.txt : 20020410 0000899243-01-501664.hdr.sgml : 20020410 ACCESSION NUMBER: 0000899243-01-501664 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011108 ITEM INFORMATION: FILED AS OF DATE: 20011108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLAINS RESOURCES INC CENTRAL INDEX KEY: 0000350426 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS) [5172] IRS NUMBER: 132898764 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10454 FILM NUMBER: 1777646 BUSINESS ADDRESS: STREET 1: 500 DALLAS STREET 2: STE 700 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7136541414 MAIL ADDRESS: STREET 1: 1600 SMITH STREET STREET 2: SUITE 1500 CITY: HOUSTON STATE: TX ZIP: 77002 8-K 1 d8k.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 8, 2001 PLAINS RESOURCES INC. (Exact name of registrant as specified in charter) DELAWARE 13-2898764 (State of Incorporation) (I.R.S. Employer Identification No.) 0-9808 (Commission File No.) 500 DALLAS STREET, SUITE 700 HOUSTON, TEXAS 77002 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 654-1414 ================================================================================ ITEM 9. REGULATION FD DISCLOSURE In accordance with General Instruction B.2.of Form 8-K, the following information shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS All statements, other than statements of historical fact, included in this report are forward-looking statements, including, but not limited to, statements identified by the words "anticipate," "believe," "estimate," "expect," "plan," "intend" and "forecast" and similar expressions and statements regarding our business strategy, plans and objectives of our management for future operations. These statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions. These statements, however, are subject to certain risks, uncertainties and assumptions, including, but not limited to: . uncertainties inherent in the exploration for and development and production of oil and gas and in estimating reserves; . unexpected future capital expenditures (including the amount and nature thereof); . impact of crude oil price fluctuations; . the effects of competition; . the success of our risk management activities; . the availability (or lack thereof) of acquisition or combination opportunities; . the impact of current and future laws and governmental regulations; . environmental liabilities that are not covered by an indemnity or insurance, and . general economic, market or business conditions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those in the forward-looking statements. Except as required by applicable securities laws, we do not intend to update these forward-looking statements and information. DISCLOSURE OF FOURTH QUARTER 2001 ESTIMATES The following table reflects the Company's current estimates of certain results for the fourth quarter of 2001. These estimates are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties and there is no assurance that these goals and estimates can or will be met. Any number of factors could cause actual results to differ materially from those in the following table. The estimates set forth below are given as of the date hereof only based on information available as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in the Company's filings with the Securities and Exchange Commission ("SEC"), which are incorporated by reference herein. 2 OPERATING AND FINANCIAL GUIDANCE
Quarter Ended December 31, 2001 ------------------- ESTIMATED SALES VOLUMES Barrels of oil equivalent - MBOE 2,525-2,600 MBOE PER DAY 27.4-28.3 % Oil 94% % Gas 6% ESTIMATED OIL PRICE DIFFERENTIALS - $/BO Estimated Differentials to NYMEX Prices - pre hedge $5.75 - $6.00 Estimated Hedging gain (loss) based on: ($ in thousands) $20.00 NYMEX $ 6,900 $21.00 NYMEX $ 5,900 $22.00 NYMEX $ 5,000 $23.00 NYMEX $ 4,000 $24.00 NYMEX $ 3,000 $25.00 NYMEX $ 2,100 $26.00 NYMEX $ 1,100 $27.00 NYMEX $ 150 $30.00 NYMEX $(4,400) CRUDE OIL HEDGE POSITIONS - BARRELS PER DAY Collars -Floor $20.00; Cap $27.00; Cap Limit $30.00 6,000 Puts - Floor $20.00 6,000 Swaps - Average price $27.15 per barrel 10,500 Calls - Average price/bbl $35.74 9,000 OPERATING COSTS PER BOE Production expenses $7.25 - $7.50 General and administrative $1.00 - $1.10 DD&A - oil and gas $2.64 OTHER INCOME (EXPENSE) ($ IN THOUSANDS) Equity in earnings of Plains All American Pipeline, L.P. ("PAA") $4,600 - $4,900 DD&A - other $500 Interest expense $6,400 - $6,500 BOOK TAX RATE Current 5% Deferred 35% WEIGHTED AVERAGE EQUIVALENT SHARES OUTSTANDING (IN THOUSANDS) Basic 23,500 Diluted 25,500 CAPITAL EXPENDITURES ($ IN THOUSANDS) $24,000 - $26,000 DISTRIBUTIONS FROM PLAINS ALL AMERICAN PIPELINE, L.P. ($ IN THOUSANDS) $6,900
3 Notes: 1. Estimated Sales Volumes. Production estimates are based on historical operating performance and trends and the Company's 2001 capital budget and assume that market demand and prices for oil and gas will continue at levels that allow for profitable production of these products. Certain of the Company's operations in California that have interruptible electrical contracts have been adversely impacted by electrical service interruptions. The Company estimates that its oil and gas production for the first nine months of 2001 was adversely affected by approximately 60,000 BOE, as a result of such interruptions. Although under recent regulatory rulings the Company believes that its operations will only be affected if rolling blackouts occur and the Company has made operational changes to mitigate the effects of electrical interruptions, there can be no assurance that operations will not be adversely impacted in the future by the California power market. SEC Staff Accounting Bulletin 101 ("SAB 101") requires that revenue from crude oil production be recognized as the volumes are sold versus when produced. Due to the location of the Company's Florida properties and the transportation issues involved, reported sales volumes are impacted by the timing of the barges that transport the crude oil. The Florida crude is typically sold in shipments that range from 130,000 to 180,000 barrels. 2. Estimated Oil Price Differentials. The Company's realized wellhead crude oil price is lower than the NYMEX index level as a result of area and quality differentials. The Company has locked in a fixed price differential to NYMEX on approximately 65% of its estimated 2001 production volumes. Fourth quarter estimated differentials by area are: Onshore California - $4.70 per barrel, Offshore California - $6.90 per barrel, Florida - $14.60 per barrel, and Illinois - $1.00 per barrel and are based on current market conditions. The estimated hedging gain (loss) is calculated based on the NYMEX prices presented and the Company's current crude oil hedge positions. 3. Operating Costs per BOE. Production expenses (including production and ad valorem taxes) averaged $7.01 per BOE in 2000. The Company estimates that production expenses will average $7.25 - $7.50 per BOE during the fourth quarter of 2001, primarily due to increased electricity and fuel related expenses. Unit G&A costs exclude non cash compensation expense. DD&A per BOE is based on our year-end 2000 proved reserve volumes. This rate will be adjusted for the fourth quarter based on year-end 2001 proved reserve volumes. 4. Other Income (Expense). Equity in earnings of Plains All American Pipeline, L.P. (NYSE: PAA) is based on guidance provided by PAA in its November 7, 2001 earnings release conference call and an aggregate ownership interest of approximately 29%, consisting of (i) a 44% ownership stake in the general partner interest and incentive distribution rights, (ii) 45%, or approximately 4.5 million, of the subordinated units and (iii) 24%, or approximately 7.9 million of the common units. The Company's common ownership has been adjusted to reflect PAA's 4.5 million unit equity offering, which was announced in October 2001. The Company will recognize a noncash gain in the fourth quarter as a result of the PAA offering. Estimated interest expense consists of interest expense on our $275 million of subordinated notes, net of capitalized interest of approximately $0.9 million per quarter and estimates of 4 amounts outstanding on our revolving credit facility. The Company incurs a non-use fee of 3/8ths of 1% per annum on its $225 million revolving credit facility. 5. Book Tax Rate. The Company's book tax rate is based on an adjusted Federal rate of 33% and an estimated combined foreign and state rate of 7%. The foreign tax is attributable to the Canadian operations of PAA. The Company's deferred and current tax rates are based on current estimates of taxable income and utilization of net operating loss carryforwards. 6. Equivalent weighted average shares outstanding. Estimated basic weighted average shares outstanding are based on approximately 24.3 million shares outstanding, net of treasury shares, as of September 30, 2001, as adjusted for treasury shares repurchased through October 31, 2001. During October, we repurchased approximately 1 million shares of our common stock. Estimated diluted shares are based on the estimated weighted average basic shares outstanding, plus shares issuable upon conversion of preferred stock and outstanding options and warrants utilizing the treasury stock method for the options and warrants assuming the Company's average common stock price for the third quarter of 2001. 7. Distributions from Plains All American Pipeline, L.P. The fourth quarter cash distribution is based on PAA's recently declared $.5125 per unit distribution. The amount presented reflects estimated cash payments to be received from PAA and has not been adjusted for cash taxes attributable to the Company's equity in earnings of PAA. 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PLAINS RESOURCES INC. Date: November 8, 2001 /s/ Cynthia A. Feeback ---------------------- Cynthia A. Feeback Vice President- Accounting and Treasurer 6 -----END PRIVACY-ENHANCED MESSAGE-----